What's the difference between dividend endowment insurance and traditional endowment insurance?

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Xiao Nuo answer:

Dividend endowment insurance and traditional endowment insurance belong to commercial endowment insurance. Among them, the latter has new products in recent years, such as universal insurance and investment-linked insurance. The most fundamental difference between dividend-paying old-age insurance and traditional old-age insurance lies in the setting of preset interest rates.

Dividend-sharing pension insurance has a guaranteed interest rate, and the interest rate is predetermined. Generally, it is 1.5%-2.0%, which is much lower than the traditional old-age insurance, or there is no guarantee at all, but there is the possibility of investment income. However, the dividend-paying pension insurance also has the dividend-paying function, and the insured can use it as an investment to increase income and resist the pressure of inflation to some extent.

The traditional endowment insurance is that the insured and the insurance company sign a contract, and both parties agree on the time and the corresponding amount of pension. Generally speaking, the predetermined interest rate is fixed, generally 2.0%-2.4%. Historically, this predetermined interest rate has changed, and it will generally remain at the same level as the bank interest rate at that time. When the bank interest rate is high, this predetermined interest rate is also high. For example, in the era of high interest rate in the late 1990s, the predetermined interest rate of commercial endowment insurance was as high as 10%, but it will not exceed 2.5% at present.

In addition, because the traditional pension insurance has a fixed interest rate, it is difficult to resist the impact of inflation. If the inflation rate is relatively high, there is a risk of depreciation in the long run. 10 years ago, 1 10,000 yuan was much lower than today's 1 10,000 yuan. Moreover, this part of the funds invested in endowment insurance also lost investment opportunities to make profits in stocks, funds and other channels.

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